Energy engineers project high fuel prices, imports in Q3

The Society of Energy Engineers has projected that the prices of fossil fuels will remain high in the third quarter of 2024.

The society also projected that fuel imports would be on the rise in the period, mounting pressure on the naira.

In the projection released recently, the energy engineers said, “Fuel imports to remain high, putting pressure on foreign exchange reserves. Petroleum subsidy remains a significant burden on government finances.

“With fuel sold at different prices across the country in line with subsidy removal, price hike could hit 300 per cent in some states compared to the same time in 2023. Refineries to operate at limited capacity due to unending maintenance and upgrades.”

The group told Nigerians to expect increased oil production as new fields come online, saying ongoing efforts to revamp existing fields might boost output.

It was added that the management of the 2024 licensing round by the Nigeria Upstream Petroleum Regulatory Commission would impact investor confidence.

The SEE stated that security issues in the Niger Delta, ongoing divestments by oil majors, lack of investments, decaying infrastructure, poor governance structure and poor implementation of the Petroleum Industry Act may hinder energy growth.

It foresaw that gas production would increase as new projects came online.

Liquefied Natural Gas export is expected to remain strong, with Nigeria maintaining its position as a key global supplier.

However, gas infrastructure constraints, lack of investments and domestic supply shortfalls may persist, the society noted.

It added that power generation would increase as new plants come online, while transmission and distribution infrastructure upgrades continue.

According to the SEE, funding shortfalls due to lack of investment coupled with grid stability issues may pose a challenge.

“Potential labour unrest in the downstream and upstream petroleum sectors in solidarity with organised labour regarding cost-of-living crises.

 “Electricity sector workers may protest over unpaid wages and benefits. Workers are also poised to show solidarity with organised labour over cost-of-living crises.

“Efforts to institutionalise the Host Community Development Fund for oil and gas producing communities to continue in line with the implementation of the PIA. Expect increased community engagement and development projects. Insecurity, crude oil theft, artisanal refining, and oil spill incidents to persist,” it stated.

According to the Organisation of Petroleum Exporting Countries, Nigeria’s average daily crude oil production dipped to 1.25 million barrels per day in May.